ENGLISH ABSTRACT: Effective management of spare parts inventory is essential to companies because
it influences inventory costs and asset utilization. The vast and diverse
portfolio of spare parts, intermittent demand patterns and contradicting objectives
between departments are examples of some of the factors that complicate
Spare Parts Management (SPM). Managers of spare parts are faced
with trade-off decisions between risk and cost on a daily basis. These decisions
include, amongst many, determining appropriate stock levels and order
frequencies. Despite the importance of SPM, decisions are however often made
intuitively in practice with little factual support, and the decision-making process
is commonly constrained within departmental silos. Even though there
is a large body of academic knowledge on this topic, practical applications of
spare parts inventory solutions lag behind theoretical studies.
The majority of studies in literature focus on single components of SPM, such
as demand forecasting and parts classification, whereas fewer studies consider
the decision-making process itself. This study proposes a decision-making
framework for spare parts inventory management. The framework is based on
a wide-ranging literature review that focuses on capturing the essence of Spare
Parts Management (SPM), but also acknowledges the interconnectedness of the
problem. Therefore, core inventory management principles, as well as closely
related topics such as Supply Chain Management (SCM) and Physical Asset Management (PAM), are studied in the context of spare parts. The broad
scope of the literature study leads to a holistic approach to the problem and
prevents sub-optimization.
The proposed framework condenses principles from various fields of study
(SCM, PAM, Classification and Inventory Management) into a stepwise methodology
presented as a decision-making framework. The objective of the framework
is to provide managers with a structured process, based on factual information,
to enable better decision-making in the field. Furthermore, the
framework aims to capture the fundamentals of SPM in a simplistic manner
to ease the adoption of the framework in practice. A case study is conducted
in the South African mining industry to validate the framework. The case
study demonstrates that the framework is practical, provides structured guidance,
and assists managers to make trade-off decisions in managing spare parts
inventory.